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Dow Record Is Not for Republicans to Brag About (Gene Sperling,Bloomberg)

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swag Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-12-06 09:27 AM
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Dow Record Is Not for Republicans to Brag About (Gene Sperling,Bloomberg)
http://www.bloomberg.com/apps/news?pid=20601039&sid=aht...

. . .

The Bush administration ignores the fact that the stock market had stabilized around 10,000 a full year after it took office. Instead, the Bush team insists that its policies should be judged only in comparison with the sub-8000 level in late 2002 and early 2003.

This is consistent with the Bush approach of taking credit for improvements in job growth and deficits: Everything bad that happens has complex, multifaceted causes unrelated to the administration's policies or is a legacy of the preceding Democratic government. But any economic improvement is due to the tax cuts.

Of course, they are highly selective about when such links can be attributed to tax policies. For example, even if you judge from the time the tax cuts went into effect in 2003, the Dow has averaged only 9 percent annualized growth.

That's less than half of the 20 percent annualized gain for the market in the comparable time period following the 1993 budget of Bill Clinton's administration.

Yet, I don't seem to recall many conservative pundits attributing President Clinton's tax policies as the sole or even partial cause of the stock market's dramatic surge of the 1990s. Indeed, think of how Clinton would have been vilified by right- wing pundits had the stock market failed to rise in real terms during such a 4 1/2-year period under his watch.

Most importantly, a 2005 study by the Federal Reserve found that the 2003 tax cuts had nothing to do with the Dow's 25 percent increase that year. The Fed study found that equities unaffected by the tax cuts -- such as real-estate investment trusts and European stock markets -- rose proportionately with the Dow during the weeks in which the tax reductions were announced and passed.

. . .
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AX10 Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-12-06 09:33 AM
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1. kick
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al bupp Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-12-06 09:43 AM
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2. Worth the read, thanks /nt
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AllegroRondo Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-12-06 09:51 AM
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3. another point
the Dow only measures 40 "blue chip" stocks, which are generally seen as safe investments during bad economic times. The Dow is going up, while the broader indexes like S&P and NASDAQ are remaining mixed, which could indicate an economic slow down coming.
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louis-t Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-12-06 10:18 AM
Response to Reply #3
4. I thought it was 30 blue chips stocks.
I could be wrong.
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swag Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-12-06 12:25 PM
Response to Reply #4
5. Yeah, it's a price-weighted index of 30 blue chip stocks, whereas
the S&P 500, which has yet to regain its highs, is a capitilization-weighted index of 500 stocks and a much better representative of the broad US stock market (the Wilshire 5000 includes large-cap, mid-cap, small-cap and is even better than the S&P 500 in representing the overall market.

The Dow is not "the market" by any stretch of the imagination.
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louis-t Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-12-06 01:41 PM
Response to Reply #5
6. Thanks fer the info.
I learned something.
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applegrove Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Oct-12-06 04:31 PM
Response to Original message
7. This is so true. They want all the good news to theirs
Edited on Thu Oct-12-06 04:32 PM by applegrove
be part of their myth. Like the paper of UNION between Canada, the US & Mexico.... they want credit for any job growth from such an event..well it is about to become an employees market when the boomers retire..so job situation will improve. But that is demographics.

Just like Guilianni took credit for cleaning up the subways in NYC..just at a time when there were fewer young adults running around committing crimes.

They know no shame.

Always with the marketing. Always!!
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